Benchmark KSE-100 Index sheds more than 3,300 points as higher inflation and rising oil prices rattle investor sentiment
The Pakistan Stock Exchange (PSX) suffered a broad-based selloff on Monday as accelerating inflation and rising international oil prices triggered heavy selling across major sectors, dragging the benchmark KSE-100 Index down by more than 3,300 points.
The benchmark KSE-100 Index closed at 170,600.20 points, down 3,362.61 points, or 1.93%, from the previous close of 173,962.81 points.
The market remained under pressure throughout the session, with the index touching an intraday low of 170,396.85 points after falling as much as 3,565 points during trading. Earlier in the day, the benchmark reached an intraday high of 174,171.64 points before bearish sentiment took hold.
Analysts at Topline Securities attributed the decline to a sharp rise in global crude oil prices amid escalating geopolitical tensions in the Middle East, particularly following heightened conflict involving Israel and Lebanon.
The increase in oil prices reignited concerns over imported inflation, higher domestic energy costs and additional pressure on Pakistan’s external account, prompting investors to trim exposure to equities.
Investor sentiment was further weakened after inflation data showed Pakistan’s Consumer Price Index (CPI) rising to 11.66% in May 2026, compared with 10.89% in April. The higher-than-expected inflation reading reinforced expectations that monetary conditions could remain tight for a longer period, weighing on equity valuations.
Heavyweight stocks led the decline, with shares of Engro Holdings, Fauji Fertilizer Company, Lucky Cement, Hub Power Company and Oil and Gas Development Company collectively wiping out approximately 1,464 points from the benchmark index.
Despite the sharp decline, trading activity remained strong. Total market volume reached 590 million shares, while the value of traded shares stood at Rs31.98 billion, indicating active investor participation amid heightened volatility.
Among the most actively traded stocks, Dewan Cement Limited emerged as the volume leader, with around 43 million shares changing hands during the session.
Market participants are expected to remain focused on developments in global oil markets, regional geopolitical tensions and domestic inflation trends, all of which are likely to influence investor sentiment in the coming days.
Analysts said the latest selloff underscores growing concerns about the potential impact of higher energy prices on Pakistan’s inflation outlook, current account balance and broader economic stability.
